Question

Receivables are often classified as accounts, notes, long-lived 33 a. b. accounts, notes, other accounts, otes, inventory none of the above. c. d. All of the following are "other receivables" escept petty cash interest receivable. income taxes refundable. advances to employees. 34 a. b. c. d. The method of accounting for bad debt expense, which conforms to GAAP is: 35 direct write-off method. a. allowance method. both a and b none of the above. d. An aging schedule of accounts receivable is only prepared on the last day of the accounting period. is only meaningful to the accounting department employees. arranges the accounts by the length of time they have been unpaid. applies percentages that are determined by the EASB to the totals of cach category. 36 a. b. с. d. When the allowance method is used and an account is subsequently written off as uncollectible, the following account is debited: Bad Debts Expense. Allowance for Doubtful Accounts. Accounts Receivable. both b and c. 37 a. b. c. d. When using the allowance method, the balance in the Allowance for Doubtful Accounts: can have a debit balance before the end of period adjusting entry is made. is a contra asset account and must have a credit balance after the end of period adjusting entry is made. equals the total estimated uncollectible accounts, as determined by management at the end of the period. all of the above. 38 a. b. c. d. Notes receivable: carn interest give the holder a stronger legal claim on assets than accounts receivable. are negotiable instruments. all of the above. 39 a. b. с. d. On May 1, Smith Company makes sales of $10,000 to Jones Company. Jones needs longer than the no 30 days to pay and signs a 90 day 8 % note. On May 1, Smith Company should credit Interest Revenue for $200. debit Notes Receivable for $10,000. а. b. debit Notes Receivable for $10,200. credit Sales Revenue for $10,200. C. 40

Answer 1

ANSWERS TO THE MULTIPLE CHOICE QUESTIONS:
33.	Receivables are often classified as:
Ans.	Option B: Accounts, notes, other.
34.	All of the following are “other receivables” except:
Ans.	Option A: Petty Cash.
35.	The method of accounting for bad debt expense, which conforms to GAAP is:
Ans.	Option B: Allowance Method.
36.	An aging schedule of accounts receivable
Ans.	Option C: arranges the accounts by the length of time they have been unpaid.
37.	When the allowance method is used and an account is subsequently written off as uncollectible, the following account is debited:
Ans.	Option B: Allowance for Doubtful Accounts.
38.	When using the allowance method, the balance in the Allowance for Doubtful Accounts:
Ans.	Option D: All of the above.
39.	Notes receivable:
Ans.	Option D: All of the above.
40.	On May 1, Smith Company makes sales of $10,000 to Jones Company. Jones needs longer than the normal 30 days to pay and signs a 90 day, 8% note. On May 1, Smith Company should:
Ans.	Option B: Debit Notes Receivable for $10,000.